Introduction
Akron Manufacturing is currently challenged with accommodating the travel requirements of its top executives to the three satellite offices in Opa Locka, FL; Aurora, IL; and Renton, WA. Commercial flights and airlines’ deployment have contributed to higher costs and reduced productivity, driven by ground transportation, airport connections, and delays from overnight stays. This proposal will examine the best aircraft type for the company’s travel needs. This on-demand aviation method suits the situation, the costs, and the overall costs compared to those of first-class commercial airlines.
The Best Aircraft Type for the Company
Turboprop
Various aircraft types may be suitable for Akron Manufacturing Company’s travel needs. The first aircraft type suitable for the company’s travel needs is a turboprop. Turboprops are more fuel-efficient than other aircraft types, thereby saving the company money on operating costs (Cameretti et al., 2018). These aircraft can easily take off and land on shorter runways, which would be advantageous if the company’s satellite locations lack access to nearby large airports (Cameretti et al., 2018). Turboprops have lower cruising speeds than other aircraft types, which can prolong travel time (Voskuijl et al., 2018).
Light Jet
Another aircraft type that would suit Akron Manufacturing’s travel needs is a light jet. Light jets have a higher cruising speed than turboprops, which would help the company to reduce traveling time (JETLINX, 2022). Further, light jets have larger cabins than turboprops, which would be beneficial if the company requires transporting more than seven executives at a glance(JETLINX, 2022). However, light jets are disadvantageous because they have a higher operating cost than turboprops.
Midsize Jet
Furthermore, a midsize jet is another type of aircraft that would have worked well for Akron Manufacturing. Midsize jets possess larger cabins than light jets but are smaller than heavy jets (Eguea et al., 2020). A large cabin is beneficial if the company needs to transport more than seven executives but wants to avoid the extra space of a heavy jet. Moreover, midsize jets have a higher cruising speed than light jets, which would reduce travel time (Eguea et al., 2020). However, the downside of a midsize jet is its higher operating cost than a light jet.
Optimal Option
Based on the information above, a turboprop or a light jet could be the best option for Akron Manufacturing Company (Vasigh et al., 2021). Turboprops are more fuel-efficient and can take off and land on shorter runways, while light jets have a larger cabin and a higher cruising speed that shorter runways can limit. For this reason, a light plane would ultimately be preferred for Akron Manufacturing, as it would suit the needs of the seven executives.
On-Demand Method
Private Jet
Several on-demand aviation options are available to Akron Manufacturing’s CEO, and one of the best options is for the company to purchase a private jet. Private jets offer several benefits over commercial airlines, including convenience, flexibility, and cost-effectiveness (Gayle & Lin, 2021). Flexibility is among the benefits the company will get by owning a private jet. Private jets are advantageous because they can take off and land in smaller airports near the company’s satellite locations (Harvey & Turnbull, 2020). This flexibility will save time and money on ground transportation.
Moreover, private jets are flexible and can fly according to the company’s schedule, eliminating the worry of making connections or staying overnight in hotels. Convenience is another vital advantage the company will enjoy when purchasing a private jet. The company controls private jets and can be equipped with features that make traveling more comfortable (Kleinbekman et al., 2018). These features may comprise meeting rooms and office space. This comfort and equipment will enable company executives to work while traveling, which is difficult with commercial airlines.
Owning a private jet offers the company a significant cost advantage. Evaluating and weighing all the costs associated with commercial airlines shows that owning a private jet is cheaper than flying on a plane (Vasigh et al., 2021). Private jets have various tax advantages that could save the company money. The downsides of owning a private jet are fewer, but the advantages often outweigh them.
However, the most significant disadvantage is that private jets can be costly and drain the company of substantial sums in the event of a breakdown. The company will be required to invest in insurance for the jet to enjoy the convenience and flexibility that private jets offer. Generally, purchasing a private jet is the best option for Akron Manufacturing’s CEO. Private jets offer greater benefits than commercial airlines, including cost-effectiveness, flexibility, and convenience. The company’s executives will have the opportunity to work while traveling, and the company will save on travel expenses.
Chartering
Chartering is another on-demand aviation method that Akron Manufacturing could have considered. Chartering a private jet is an on-demand aviation method that Akron Manufacturing’s CEO may choose. Chartering will be efficient because the company will have quick access to travel services without the ongoing responsibilities of purchasing them and the upfront costs associated with them (Klaus & Tarquini-Poli, 2022). Chartering offers flexibility in taking off and landing at small airports and the convenience of equipping jets with company equipment, unlike commercial airlines, which cannot adjust to the needs of executives. Further, chartering will save the company on other costs, such as maintenance, operations, and insurance, by allowing craft ownership.
However, chartering aircraft programs is expensive and limits the number of flights per schedule (Pradeep & Wei, 2018). Another challenge the company might face is strict regulations set by charters (Weisman & Van Doren, 2020). Hence, the company will be inconvenienced by travel schedules due to the inflexibility in adjusting to the rising urgency of needs at the three satellite locations.
Costs
The following are the monthly estimated costs and expenses for a light private jet. The acquisition cost of a light private jet is approximately $4 million (Dhara et al., 2022). The monthly expenses will be $30,000 for the jet, $3,000 for fuel, $10,500 for a two-person crew, $4,500 for hangar rental, and $4,000 for insurance. The monthly operating cost of a light private jet will be $52,000. Thus, the benefits of owning a private jet are many, starting with cost-effectiveness and time savings from avoiding connections and overnight delays with commercial airlines.
The company’s executives will no longer waste time waiting in airports and making flight connections. They have direct flights to their destinations and can fly back to the satellite locations on the same day. As a result, the company will save money on ground transportation expenses and hotel accommodations.
Furthermore, a significant benefit of a company owning a private jet is the increased effectiveness of its executives. Executives will not waste time traveling; they will use that time to perform their duties. For this reason, Akron Manufacturing Company will experience increased efficiency and productivity.
The light private jet will be a valuable asset to the company. It can transport essential customers and clients for advertising and marketing purposes. The primary drawback of owning a light private jet is the initial purchase cost. However, savings in money and time can easily offset this cost, resulting in increased productivity for executives. In the long run, owning a light private jet will be a convenient investment for Akron Manufacturing Company.
Flying a light private jet is cheaper than flying seven first-class executives on commercial planes. The monthly cost of owning and operating a light private jet is $52000, less than the $75000 the company allocates to commercial airline tickets. The company will save money on food, hotel accommodation, and ground transportation expenses since the executives will conveniently fly out and back on the same day. In addition, the company will become more productive because executives’ travel needs can be easily accommodated, and they will no longer waste time waiting for flights or making connections.
The Potential of Private Aviation
Private aviation can be the most attractive alternative for companies with executives who travel frequently and on short notice. There has been a growing demand for private aviation in recent years, driven by increased business activity and the number of high-net-worth individuals (Cohen et al., 2021). This trend may increase as companies evolve to seek more convenient and efficient ways to meet their travel needs (Goya et al., 2021).
According to Yu et al. (2020), the annual turnover rate of the private aviation market is high. There are fewer travel schedule disruptions caused by employee strikes (Klaus & Tarquini-Poli, 2022). Increased efficiency is achieved by using private aviation, which saves companies from the inconveniences and delays associated with commercial flights.
Challenges
The main challenge for Akron Manufacturing will be the high initial cost of purchasing private aircraft. However, this challenge is insignificant because it is offset by savings in money and time, increased productivity, and marketing and advertising. Since the advantages outweigh the disadvantages, acquiring a light private jet will be cheaper for the company’s daily operations in the long run than using commercial airlines.
Conclusion and Recommendations
In conclusion, Akron Manufacturing Company relies on commercial airlines to transport its high-level executives to its three satellite locations in Opa Locka, FL, Aurora, IL, and Renton, WA. The CEO has observed increased costs and reduced productivity and has requested a proposal that would make sense. After evaluating and identifying options that suit the company, I have determined that purchasing a private jet will be the most significant option. The aircraft type will be a light jet, and the acquisition cost will be approximately $4 million.
The monthly costs of operating and owning a private light jet will be $52,000, which includes fuel, insurance, operating costs for the jet itself, and hangar rental. This option will be a meaningful cost-saving measure for the company, as they currently spend approximately $90,000 per month on travel expenses. The company will also greatly benefit from the light private jet because it saves time, thereby increasing the productivity of high-level executives.
The light private jet will be used for other purposes, such as advertising and transporting significant customers and consumers. The company’s main challenge is the high initial cost of purchasing a light private jet. However, executives’ money, time, and enhanced productivity will efficiently balance this expense. The company will invest profoundly by purchasing and owning a light private jet. This option will not only be cost-saving but also increase executives’ productivity, as they will not waste time traveling to and from the three satellite locations.
The following recommendations are pertinent to the productivity and profitability of Akron Manufacturing Company, based on the analysis of the collected research information. Firstly, Akron Manufacturing should consider purchasing a light private jet to reduce monthly costs from $90,000 to $52,000. Secondly, the company should equip the acquired light private jet with office-grade amenities to enable executives to use the long flight time for productive work. Lastly, the company should consider acquiring vans for each satellite location to pick up executives from the airport.
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